Diamond Market Comment (June 14, 2012)

As we move into June, diamond investors are using industry shows being held in Las Vegas to gauge diamond market sentiment and outlook.

In a dimming diamond market, the US appears to be an ongoing bright spot, with investors optimistic that demand will remain stable. Bridal purchases continue to drive sales in the US, with noted interest for SI diamonds. The US market is also seeing some improvement in demand for fancy shapes, particularly princess and cushion.

In India, the demand for SI diamonds continues to be steady. Polished prices overall, however, appear to be continuing a downward price trend. Markets outside the US are beginning to feel the impact of global economic conditions.

Tough circumstances have been reported in manufacturing and trading centers in India, Belgium, and Israel, with tight liquidity often cited as part of the problem. Demand from Europe is slow and Chinese demand appears to be slowing.

Retail sales in Hong Kong reportedly rose at the slowest pace since 2009. Reasons cited for the slowdown include reduced spending in mainland China and a reduction in local household spending in light of turbulent markets.